Bangladesh News

Price of coarse rice is likely to remain Tk 27 to Tk 30 per kg even if the country witnesses a bumper Boro production this season, food ministry sources and economists say.

They attribute this to high cost of Boro production, and global shortage and price hike of rice.

In the wake of around 50 percent increase in production cost, the food ministry has set procurement price of Boro rice this season at Tk 28 a kg , considering 40 percent profit on production cost of farmers.

“We are trying to strike a balance between producers and consumers’ interests by fixing procurement price at Tk 28 per kg,” Food Secretary Mollah Waheeduzzaman said at a press briefing at his office yesterday.

“We cannot predict retail prices of fine varieties like miniket and nazirshail but we can say price of coarse rice is likely to remain between Tk 28 and Tk 30 a kg.”

He however said it is not possible to say exactly what the prices of rice will be in the coming days since that will also depend on the demand and supply of the food grain in the market.

Meanwhile, the Centre for Policy Dialogue’s Head of Research Dr Uttam Kumar Deb said price of rice may range from Tk 27 to Tk 29 a kg following Boro harvest and the government’s announcement of procurement price.

Uttam , who is leading a study team on Boro production cost and possible rice price, was in Madanpur of Netrokona yesterday. Contacted over telephone, he said they interviewed farmers and found that they supported the government-fixed procurement price saying they would not face losses if they sell rice at this price.

Trading Corporation of Bangladesh (TCB) reported that rice price ranged from Tk 34 to Tk 36 yesterday, which is 67 percent higher than that last year and 11 percent higher compared to that a month ago.

Price coarse rice last year was Tk 20 to Tk 22 a kg, and Tk 31-32 a kg just a month back, the TCB report says.

Bangladesh Bureau of Statistics (BBS) in its weekly report says price of coarse rice last week was Tk 36 per kg in Barisal and Chittagong, Tk 35 in Sylhet, Tk 34.75 in Dhaka and Tk 34 in Rajshahi and Khulna divisions.

According to government estimates, cost of Boro production went up to Tk 27,928 per acre this year from Tk 18,670 last year, which is around 50 percent increase.

The estimate says production cost of Boro rice this year is Tk 19.23 each kg.

In the first phase of last year, the government set the procurement price of rice at Tk 16 a kg , considering 15 percent profit for the farmers, but it failed to buy rice. It then increased the price to Tk 18, considering 35 percent profit for the producers.

Director General of Food Pius Costa, briefing newsmen, said the government prioritised five aspects before fixing the procuring price of rice. These include cost of production, farmers’ incentives, consumers’ interest, enhancement of government food stock and market price.

Dr Uttam said the CPD in its primary survey found that production cost of each kg Boro rice is Tk 20.80 on an average.

Farmers in Mymensingh told the CPD team that Boro production will be bumper if no natural calamities occur in the next two to three weeks, he said.

“But, as production cost is high and food shortage is global, rice price will not be as low as it was earlier,” the agro-economist said.

Food Planning and Monitoring Unit Director General Pranab Chakravarty at the press briefing said total demand for food grains will be 2.60 crore tonnes next fiscal year while the production target is 2.59 crore tonnes given that the target of Boro production is met.

The government has fixed a target of procuring 15 lakh tonnes of rice from domestic market and 17 lakh tonnes from global market to build a safe food stock.